Whilst it is never true to say that "nothing" is going on in the FX world, an observer could be forgiven for thinking that to be the case at the end of last week. The Australian and NZ dollars strengthened by about 0.5%, as did the Norwegian krone, the Swedish krona weakened by a similar proportion and that was it. Nothing else moved. The US and Canadian dollars, the euro, the Swiss franc, the Japanese yen and the British pound all start today within a dozen ticks of Friday's opening levels.
It looked very much as though, after more than two weeks of angst about the US debt ceiling nonsense, investors had run out of inspiration. Well, almost run out: the prospect of a prolonged period of Federal Reserve stimulus has persuaded many of them to chase higher interest rates once again, hence the success of the Aussie (2.5% benchmark interest rate) and Kiwi (2.5%) dollars. That logic could have played a part in the divergence of the northern Scandinavians too, as the NOKky (1.5%) strengthened against the Stocky (1%), but Thursday's news of an uptick in Swedish unemployment will have contributed to the move.